Stora Enso consolidates corrugated operations
Monday, September 19, 2016
Paper and packaging giant Stora Enso is set to close its Heinola corrugated packaging plant in Finland, citing market pressure and shrinking volumes.
It proposes to move the site's corrugated packaging production to its Lahti plant, 40km away.
The company will begin a six-week consultation with Heinola's 130 staff tomorrow (20 September). Stora said it hoped that a number of employees would be able to relocate to Lahti, which will benefit from a €19m (£16m) kit and infrastructure investment, including a new corrugator.
Stora senior vice president Peter Torstensson said he could not comment further on job losses until the consultation was over but that it would be “one of the more important things that will be discussed during the process.”
Torstensson did not give any further detail on the £16m funding that will support the project.
He said: “I think the Finnish corrugated market has been under pressure for quite a long time now and it is significantly smaller today than it was before the financial crisis in 2008. We have seen the market shrinking and although the worst is behind us, at the same time we are now in a situation where we have volume for one factory but not for two.
“We want to concentrate our efforts on Lahti and make a significant investment to build our Centre of Excellence and make sure we remain strong.”
The firm said the ambition to create a Centre of Excellence is central when concentrating operations to the 140-staff Lahti plant.
The 150-staff Heinola fluting mill for containerboard will not be impacted by the plans to close its sister corrugated plant. Stora packaging also has a small 45-staff converting unit in Kristiinankaupunki.
Stora Enso reported that the plan would have a negative impact of around £7.7m, which will be recorded in its 2016 third quarter results, but would create gains in the long-term.
“We will have a significantly lower cost base and will be able to further build on our reliabilities and our stability of production, which is already starting at a good level,” said Torstensson.
Last June, Stora sold its German Kabel paper mill to Hagen-Pulp & Paper for a cash consideration of £17.8m.
In 2015, revenue from its packaging division made up about 9% of its total revenue, which was around £8.5bn.